So you’ve lost a client. What’s the first thing you do?

PANIC! Sound the alarm! It’s the end of the world!

Just kidding. Of course you don’t do that.

Clients come and clients go (and hopefully they come more often than they go), and that’s just the circle of life when it comes to business. Still, losing a client is tough for any business owner, whether they run a small business that’s only been around for a few years or they’re at the helm of a multi-national corporation. No matter what kind of business you run, a defecting client can create financial stress, lower team morale, and give you that “I’ve-just-been-dumped” feeling in the pit of your stomach.

But if you can learn to take rejection in stride, your business will be better equipped to forge ahead despite any challenges and setbacks. Let’s break down the best steps to take in the wake of losing a client so that you can keep your business on its feet.

1. Ask As Many Questions as You Can

When possible, it’s important to get as much feedback from your client about why they’re leaving and where they’re taking their business next. Gathering this information will let you know if the account is still salvageable, if losing the client was avoidable or inevitable, and what can be done next time.

After this “exit interview,” sit down and evaluate your own perspective on your business relationship with the customer. In her rundown of how to handle losing a major client for Harvard Business Review, Karen Firestone, President and CEO of Aureus Asset Management, suggests the following:

  • “Ask yourself whether you understood their expectations, and if not, whether this was preventable.
  • Evaluate whether your firm could or should even try to meet their expectations.
  • And ask yourself if this is part of a larger pattern, or just an isolated incident.”

Taking some time to reflect on what went wrong will help you with client retention in the future.

2. Don’t Burn Any Bridges

While it may be tempting to really tell a defecting client how you feel, especially if the working relationship has been a difficult one, parting on cordial terms can be beneficial for your business in the long run. For starters, it leaves the door open for the client to return in the future. Secondly, as Dorie Clark, marketing strategist and professor at Duke University, writes in Entrepreneur, an amicable breakup makes referrals possible when losing a client:

“In situations where the client likes you, they’ll often feel bad they have to end the consulting relationship. That makes them particularly receptive to a referral request…They may well connect you with like-minded colleagues, because they know it’s a win-win.”

3. Turn to Your Team

Losing a client is tough for you as a business owner, but it’s also tough for the teams that you manage. Letting panic run rampant through your company lowers team morale, which in turn ruins employee productivity and the quality of their work, and that’s the last thing your business needs after losing a client. Be realistic with your team, but be reassuring. Brent Gleeson, Co-founder and CMO of Internet Marketing Inc. writes in Inc., doing a morale check is an important step of recovering from losing a client:

“As always, the best thing to do is communicate with the team members. Help them understand what happened, why, and what you are going to do to move forward. As long as they know the plan and feel secure in their role, recovery time will be that much quicker.”

It’s important that you and your team learn the lessons that come along with losing a client. It’s equally as important that these lessons serve as motivation, not discouragement.

4. Adjust Your Financials

Losing a client of any size is going to have a financial impact on your business. Once you figure out how big that financial impact is going to be, you have a few tasks.

The first is to figure out staffing. As Gleeson writes, finding ways to keep your team together is vital in preserving a positive work environment:

“Even if employees are dedicated to certain accounts, make sure that you have a plan for migrating your people to other areas of the company should you lose that client. Laying people off and then hiring more resources again when you need them can create a highly volatile environment.”

The second is to look to replace the old business with new business. Dedicating a few extra resources to your sales efforts can give you time to thoughtfully improve the business practices that will help keep your other clients around for longer.

Finally, consider gauging your current clients’ interest in upping their workload (and budget). You may not have to immediately replace one client with another if your existing clients are in need of extra services.

Breaking Up is Hard to Do

The above adage is just as true in business as it is in romantic relationships. While it will likely take some time (and a few sad songs) to recover, taking the above steps will help you bounce back stronger than ever. Keep a cool head and handle rejection in stride, and you’ll ensure that your company continues to flourish in the good times and the bad.


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